Drosophila melanogaster has been acknowledged as a premier genetic model system for understanding gene function, developmental networks and molecular basis for genetic disorders including cancers. Drosophila has blood cells or hemocytes that are important for innate immune functions as well as tissue remodeling and wound healing. We initiated a molecular genetic analysis of Drosophila hematopoiesis with the goal to understand the relationship of this process to vertebrate blood development and disorders such as Leukemia. We found that a gene sharing similarity to the Acute Myeloid Leukemia (AML1) protein is essential for the development of 1 of the hemocyte types in Drosophila, called crystal cells. This work led to a lineage diagram for Drosophila hematopoiesis that showed several conserved components. Also the strategies for this development are conserved with similar signaling pathways involved in Drosophila and vertebrate hematopoiesis. More remarkably, concepts such as a common precursor for vascular and blood cells (hemangioblasts) are also conserved. In this proposal, we will first further analyze the functions of the conserved Notch/ PDGF-VEGF receptor/JAK-STAT pathways in Drosophila hematopoieis. We will develop microscopic imaging methods to analyze the hematopoietic process at a single cell level. We will find the molecular basis for the asymmetry that allows hemangioblast divisions to create mixed cell types. And finally, we will analyze novel genes identified from a genetic screen and initiate new genetic screens to identify precursor and possibly stem cell populations and novel proteins that are involved in Drosophila and vertebrate blood cell maturation.